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Section 1.03. The fulfillment center is currently under construction and will require, <br />before completion, the extension of electric service at an estimated cost of $342,546 for a three <br />phase radial Electric Service. <br />Section 1.04. The San Marcos Electric Utility Rules and Regulations allow the City to <br />participate in the cost of electric service extensions where it can be determined that annual <br />revenues to be paid by a large commercial or industrial electric customer (excluding pass through <br />Fuel and Power Cost Recovery) will generate margins above the cost of constructing the <br />extensions. <br />Section 1.05. Amazon has projected that it will use 108,077,340 kWh of electric power <br />during the five year term of this Agreement which the City has determined would generate <br />annual revenues exceeding the cost of constructing the extensions. <br />Section 1.06. For the reasons stated in these Recitals and in consideration of the mutual <br />benefits to and promises of the Parties set forth below, the Parties are entering into this <br />Agreement and agree to the terms and conditions set forth in this Agreement. <br />ARTICLE II <br />DEFINITIONS <br />Section 2.01. "Affiliate" means any entity that directly or indirectly controls, is <br />controlled by, or is under common control with, Amazon. corn Inc. or Amazon. <br />Section 2.02. "Business" means the operation by Amazon or its Affiliate of an <br />approximately 855,000 square -foot fulfillment center in San Marcos, Texas. <br />PJ <br />